Direct automotive answer
What is annual fuel cost based on?
FuelEconomy.gov estimates annual cost using standardized mileage, city/highway share and current assumed fuel prices. Your distance and local prices can differ. This fuel economy and range answer depends on Annual mileage, Fuel price, City/highway mix, Fuel grade. Confirm each against the exact vehicle rather than assuming a class-average figure. The sections below break this down further: adapting it to your situation, why it is the best cross-fuel comparison, the assumptions inside the number, calculating your own figure. 5 related follow-up questions are answered separately below, each with its own conditions attached. This site reviews every answer under a configuration-first standard, verified against FuelEconomy.gov and linked to related fuel economy and range questions for the adjacent decisions this one usually raises. It sits within a fuel economy and range library of 8 related questions, held to the same configuration-first standard.
The EPA annual fuel-cost estimate assumes a standard annual mileage and a national reference fuel or electricity price, applied to that configuration's combined efficiency figure.
Its purpose is comparability: because every vehicle uses the same assumptions, the estimates rank options consistently even though the absolute number will not match your own spending.
Adapting it to your situation
Two adjustments make it personally meaningful.
- Substitute your real annual mileage for the standard assumption
- Substitute your local fuel or electricity price
- For a plug-in, weight the split between electric and gasoline operation as you would actually drive it
- For an EV, account for time-of-use electricity rates if your utility offers them
Why it is the best cross-fuel comparison
MPG and MPGe are different units and cannot be compared directly. Annual energy cost expresses both in money, which is the only common basis.
It is also the figure to use when computing payback on a hybrid or plug-in premium against its conventional sibling.
The assumptions inside the number
EPA's annual fuel cost applies a fixed annual mileage assumption and national average energy prices to the certified test results. Every vehicle gets the same assumptions, which is what makes the figures comparable.
Your mileage is almost certainly different, your local fuel or electricity price is almost certainly different, and your driving mix is different. Treat the figure as a ranking tool instead of a budget.
- Fixed annual mileage assumption, identical for every vehicle
- National average energy prices, not your local rate
- Based on certified test results, not real-world driving
- Designed for comparison between vehicles
Calculating your own figure
Take the vehicle's combined rating, divide your actual annual mileage by it to get gallons, and multiply by your local price. For an electric vehicle, take kilowatt-hours per 100 miles, scale to your mileage, and multiply by your electricity rate.
Regional electricity prices vary far more than gasoline prices do, and public DC fast charging can cost several times the home rate. Where you charge changes the answer more than which vehicle you pick.
- Use your real annual mileage and local prices
- For EVs, work from kWh per 100 miles
- Electricity rates vary regionally far more than fuel prices
- Public fast charging can cost several times a home rate
What changes the answer
- Annual mileage
- Fuel price
- City/highway mix
- Fuel grade
Common follow-up questions
Does the estimate reflect my driving?
Not directly. It uses standard mileage and reference prices so vehicles rank consistently. Substitute your own mileage and local prices for a personal figure.
Is it useful for comparing an EV to a gas car?
Yes: it is the best available single comparison, because it expresses both fuels in money, not in incompatible efficiency units.
Where do I find it?
On the window sticker's fuel-economy panel and in the certification record for that configuration.
Will I pay the EPA annual fuel cost?
Almost certainly not exactly. It uses a fixed mileage assumption and national average prices so vehicles can be compared on the same basis.
How do I estimate my own annual cost?
Divide your actual annual mileage by the combined rating to get gallons, then multiply by your local price. For an EV, scale kWh per 100 miles to your mileage and multiply by your electricity rate.
Related questions
Fuel economy and range questions and answers: the complete category